One very popular issue, especially in divorce cases or following the death of a spouse is that of community property. Often, when spouses get divorced or die, there is the issue of splitting and sharing properties, proceeds or valuables that were acquired during the marriage.
These properties include a wide range of items, from cars, to homes, furniture, jewelry, paintings, etc. They can also include intangible items of value, such as stocks and other financial assets, even debt.
Ownership in marriage is often determined by the laws and policies governing the state in which the couples lived in. Common laws regarding property are often different from community property laws of the state. In marriage, these state categorizations may seem unimportant, but in the situation of a divorce or the death of either party, property sharing becomes an issue.
As a result of the complexity that is involved in splitting community property, some laws have been established that guide this process and it is necessary that you arm yourself with information about the laws governing the splitting of property in your state.
What is Community Property?
When we define Community property we mean all the properties acquired by a couple in marriage. These are the property of both partners and are split amongst them upon divorce, annulment, or death. In the situation where there is no evidence that proves sole ownership of a property, the law automatically presumes joint ownership of such property. Gifts and Inheritance is often not classified as community property. Examples of community property include;
- Income earned by both partners during the marriage
- Home and household furniture purchased with income earned during marriage
- Interests income earned by family business investments
Separate property is the opposite of community property and it refers goods that were acquired prior to marriage, inheritance or gifts and anything that either party acquired after splitting up. Sharing of community property may take place item by item or by values, but this division is always governed by the common property law.
What is Community Property Law?
Community property law is the law that governs the sharing of property after marriage in a community property state. Community property law is the set rules that treat the belongings of married people as belonging to both of them.
This property law treats community as though they are joint assets in a business partnership. In the community property law system, acquisitions are often classified as community or separate property.
In the past, the law gave the husband the exclusive rights to manage and control community property, but these laws have since been modified and both spouses now share equal control over community properties.
In some states community law demands that the properties be shared 50/50 between both parties but the community property law in some other states recognizes equitable distribution of acquisitions which may lead to unequal division of such.
In the states that adopt the equitable distribution of property, there are several factors that affects a court decision. Because community laws affect the sharing of properties and other valuable assets, they can have a huge impact on the future of a spouse should they be forced to part ways with an asset that was deemed to be a separate property.
Factors Used in the Division of Community Property
Generally, under community property law, all assets and liability are jointly owned by the couples, this means that they are both entitled to half the entire property. But in some cases, the court is often forced to consider certain factors when deciding which properties goes to who. Below are some of the factors considered in court:
- Child Custody: Often, the court considers which parent is in custody of the couple’s children. In cases where one parent is granted sole custody of the children, the court is likely to split the property in favor of such parent
- Dependency: In the situation where one parent depends solely on the other financially for basic needs such as feeding, housing and clothing. The court considers the difference in the earning power of both parties and also their future employability and this might influence the court’s ruling
- Health: Another important factor considered in the division of community property is the health status of both parties. The judge considers the health, physical and mental state of the couple before ruling. In most cases there is a bias towards the party that is suffering from certain issues.
- Liquidity and Income Production: This is a measure of the value of the properties before division. The court considers the value and income potential of an acquisition before allocating it to any of the couple
- Nature property: The court might consider the connection each party have with a property before deciding who should have it. One party might manage the property better than the others
Splitting community property is an important process. Arming yourself with the appropriate knowledge can help you fair better when it comes to these matters.